How can faces be rotated around their individual normals?
You need to press a key to specify the axis. (i.e. X, Y or Z)

Setting the Transform orientation aligns the XYZ coordinates to something, e.g.:


Global aligns the axes to the world
Local aligns the axes to the selected object(s) rotation
Normal aligns the axes to the selected element(s) normal


etc.

Note that pressing the axis key once always snaps to the Global orientation, regardless of the setting in 3D view > Header. To use the orientation specified in 3D view > Header, press the axis key twice. (e.g. GZZ)

With your settings, (Individual origins, Normal, Face) to rotate each face around its normal we should rotate around the Z, see the wiki:


  The z-axis of the manipulator will match the normal vector of the selected [element]


So by pressing RZZ: